The Decentralized Continent: The Real Face of Europe’s Web3 Landscape

After five years building startups in the European Web3 sector, Afeng has recently returned to Beijing. During his time abroad, he split his efforts between Germany and France, hosting numerous industry meetups and connecting with other Web3 entrepreneurs who are also forging their path in Europe.

Afeng’s perspective on the European Web3 market is clear-cut: it’s a haven for idealists. While pure idealism hasn’t given Europe a decisive edge in the global crypto arena, it has cemented the region’s faith in the principles of Web3.

From Switzerland’s Crypto Valley in Zug to Station F in Paris, from Berlin Blockchain Week to Amsterdam’s DeFi innovation community, Europe continues to craft a crypto narrative that stands apart from the stories unfolding in the US and Asia.

When we look beyond the crypto fervor of the US, Japan, Korea, and the Middle East to this quieter region, one question stands out: What unique position does Europe occupy in the global crypto landscape?

A Decentralized Continent

If you had to sum up Europe’s crypto industry in a single phrase, Afeng would choose “decentralization” without hesitation.

This decentralization is, in part, about not idolizing a single central figure.

In the US, many people are drawn to the industry by star founders and influencers. In Europe, most enter Web3 driven by their convictions about privacy, open protocols, and free markets. Their motivations are straightforward; for many founders, the primary goal isn’t to make money, but to do something they believe truly matters.

Decentralization also manifests geographically in Europe, which lacks a single dominant hub. Each country and city brings its own distinct character, forming a fragmented yet richly textured Web3 map.

Germany is the first example.

Germany doesn’t have a super-sized metropolis, and its industries are widely dispersed. Many world-class companies operate out of small towns. Even Berlin, the largest city, has just over three million residents—comparable to a mid-sized city in China.

Long winters and a reserved social climate make Germany an engineer’s paradise. Germans prefer to stay indoors and focus on technical work, and their R&D capabilities are strong. If you attend a conference in Berlin, you’ll notice that technical professionals always outnumber those in business roles.

“Few Germans choose business careers; most focus on research or development,” says Mike, who runs a wallet project in Germany.

France, by contrast, has a completely different style.

In France, a significant number of crypto professionals come from traditional sectors like FMCG, fashion, and luxury goods. During the NFT boom, many top talents from L’Oréal, LV, and other major brands transitioned into Web3. With strong social and market development skills, they naturally take on business roles—negotiating partnerships, promoting projects, building communities, and driving market expansion.

Switzerland is the third country, and its defining trait is “neutrality.”

Switzerland boasts a clear and friendly regulatory framework and offers relatively lenient tax policies for crypto, making it ideal for nonprofits and research organizations. Web3 foundations such as the Ethereum Foundation and Solana Foundation have chosen Switzerland for its stable, predictable institutional environment.

Lisbon, Portugal, rounds out the list.

Lisbon’s reputation in the Web3 scene is largely due to its people.

Portugal’s digital nomad and golden visa programs, combined with its pleasant climate and affordable cost of living, have attracted many Americans who have already found success in Web3.

Many of these individuals no longer need to manage daily operations. Having made their money, they settle in Lisbon for a laid-back retirement, occasionally joining investments, meetups, and community events.

Germany’s technical prowess, France’s business savvy, Switzerland’s compliance advantage, and Lisbon’s digital nomad culture together create a mosaic of Europe’s Web3 sector.

Old Money Crypto Culture

When Web3 comes up, most people first think of the US, Hong Kong, or Singapore. But Afeng believes Europeans are just as, if not more, sensitive to decentralization and privacy than those regions.

Half of the top ten TVL projects are European. This stems partly from engineering culture, but also from a willingness to back new ventures—even those with uncertain returns.

“In the past, a project’s success was judged by whether it could list on Binance. Now, the focus has shifted to positive cash flow and real user adoption. In Europe, once a project finds its audience, competition isn’t as fierce as in the US or Asia. Europeans treat it as a solid business, not a quick cash grab,” Afeng explains.

He adds, “Although Europeans may not excel at math, they’re willing to spend time on research, which leads to many small, high-quality teams that do quite well financially.”

Web3 remains a niche industry in Europe, with market penetration at about 6%. In other words, only six out of every hundred people use crypto—a rate noticeably lower than in the US or Asia. The user base is concentrated in the 25 to 40 age range.

Unlike the high-frequency, high-leverage trading common in Korea and some Asian markets, most Europeans don’t risk their entire wealth in crypto. For them, digital assets are part of a broader portfolio, not an all-or-nothing bet.

This reflects Europe’s history and wealth structure. Many have lived through speculative eras and aren’t desperate for overnight riches.

Among the wealthy, fortunes are often built over generations. They’re more likely to “save a Bitcoin for their descendants” than to chase the next 100x or 1000x token for instant social mobility.

Another constraint: most compliant European exchanges don’t offer high leverage, and derivatives are tightly restricted. This regulatory design discourages reckless speculation.

Still, Europeans are far from risk-averse. During market cycles, interesting patterns emerge: when the market is down, they work locally; when it rebounds, they move to lower-cost countries to trade crypto full-time.

“Last year, I met an Italian living in Switzerland. He works in Swiss restaurants for four months a year, then spends eight months—four each in Thailand and the Philippines—trading crypto full-time,” Afeng recalls.

The Stablecoin Surge

Like elsewhere, stablecoins are considered one of the most promising directions in Europe, with nearly every bank exploring related solutions. But the reasons for their popularity differ from those in Asia or emerging markets.

The primary driver is payment infrastructure.

The EU still lacks a unified, independent payment and settlement system, relying heavily on US networks like Visa and Mastercard. For many Europeans, this means their economic lifelines are tied to foreign systems. Both policymakers and banks are eager to develop a European solution, and stablecoins—along with on-chain clearing networks—are at the center of this conversation.

Geopolitics and industrial migration are also key factors.

Following the Russia-Ukraine war, energy costs and manufacturing expenses soared, putting pressure on European industry and prompting many factories to relocate to Asia-Pacific. As production globalizes, cross-border trade settlements become more frequent and complex, raising the need for efficient solutions across currencies and regulatory regimes.

Compared to traditional cross-border remittance, stablecoin-based on-chain settlement offers clear advantages in speed and cost.

Another shift comes from changes in consumer behavior.

Post-pandemic, Europeans have embraced online shopping, with sellers from around the world. To enable seamless cross-border, cross-time-zone, and cross-currency transactions, lighter, lower-cost, and faster payment options are preferred—making stablecoins even more practical.

But real-world adoption faces challenges.

Europe’s banking sector is deeply traditional, with many institutions boasting centuries of history. Both internal governance and risk appetite make rapid adoption of new technology difficult. Before Trump’s presidency, European finance was largely hostile or indifferent to crypto.

The real shift began when European institutions realized that US capital and major players were investing heavily in crypto.

Still, many traditional finance professionals have little direct experience with wallets, on-chain interactions, or DeFi protocols. When learning, they often turn to consulting firms that are themselves quite conservative.

“I see a huge market, but traditional Europeans may need a long time to catch up—unless outside forces intervene,” says Vanessa, a Web3 veteran who’s lived in Europe for years.

Vanessa notes that once-popular trends like the metaverse and NFTs have faded in Europe. BTCFi was once a favorite, with Europeans investing heavily, but these projects failed to generate strong cash flow. Staking Bitcoin for a few percentage points of annual yield often led to issues, making direct holding safer. As a result, most BTCFi projects have lost their appeal.

As for Europe’s true Web3 opportunity, Afeng puts it simply: “Europe has two big strengths—a population nearing 600 million, most of whom live in developed countries.”

In developing countries, average monthly income may be just a few hundred dollars. European users typically earn five to eight times more. For projects, a higher net worth means greater willingness to pay for products and services—and higher potential returns.

Crypto Taxation: How Does It Work?

On April 20, 2023, the European Parliament passed the Markets in Crypto-Assets (MiCA) regulation with 517 votes in favor—one of the world’s most comprehensive digital asset regulatory frameworks, covering 27 EU member states plus Norway, Iceland, and Liechtenstein in the EEA.

Article 98 of MiCA, combined with the EU’s eighth Directive on Administrative Cooperation in Tax Matters (DAC8) and each country’s unique features, creates a complex but increasingly clear tax framework. A key principle: crypto transactions themselves are exempt from value-added tax (VAT).

Despite these unified rules, each country maintains its own tax quirks. Germany and France are especially noteworthy in the crypto compliance process, serving as leading case studies in the industry.

Germany was the first country to officially recognize the legality of Bitcoin and other crypto transactions. It ranks second only to the US in the number of Bitcoin and Ethereum nodes.

In Germany, crypto is classified as “private property,” and taxation covers income tax, VAT, and specific activity taxes.

If crypto is held for more than a year before sale, profits are exempt from income tax; if sold within a year, profits are taxed at rates up to 45%.

When using crypto to pay for goods or services, any appreciation since acquisition counts as income and is taxed. However, if held for over a year, such gains are also tax-exempt.

Staking, lending, and airdrops require income tax reporting; mining is treated as a business activity and subject to business tax.

In France, crypto is treated as movable property and faces higher tax burdens—long-term holdings aren’t tax-exempt.

France’s VAT rules match Germany’s, but trading profits are subject to a 30% capital gains tax. If trading is considered a professional activity, business profits tax applies and may be higher. Tax liability only arises when crypto is sold for fiat, and profits under EUR 305 are exempt.

French crypto mining businesses are taxed under BNC (non-commercial profits) at 45%. Non-commercial miners with annual income below EUR 70,000 may qualify for certain BNC deductions, but those classified as commercial entities cannot.

Beyond tax, other regulatory policies are gradually taking effect. As Vanessa says, this is the best era: as compliance advances, more people are building long-term, stable businesses rather than focusing on token issuance.

To many, Europe’s Web3 scene may seem subdued, lacking dramatic stories of 100x tokens and wild market swings.

But from another angle, this land where idealism meets institutional rigor is breeding a new class of crypto companies and participants. They care more about user adoption, project longevity, and finding sustainable business models in a tightly regulated environment.

There’s every reason to believe that this idealist soil will produce many distinctive new crypto ventures in the years ahead.

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